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(Chicago Tribune (KRT) Via Thomson Dialog NewsEdge) May 13--The furor over the National Security Agency's collection of Americans' phone records intensified Friday, with one telecommunications giant slapped with a $5 billion damage suit for allegedly violating privacy laws and the former head of another firm saying through a lawyer that his company refused to participate because he thought the program was illegal.

Qwest, a Baby Bell serving 15 million customers mostly in the West, was approached in the fall of 2001 to permit government access to private phone records, according to an attorney for Joseph Nacchio, who at the time was Qwest's chairman and CEO.

Nacchio refused because the government had failed to obtain a warrant or cross other legal hurdles to obtain the data, according to the lawyer, Herbert Stern. "Mr. Nacchio concluded that these requests violated the privacy requirements of the Telecommunications Act," Stern said Friday in a written statement.

The nation's other major phone companies--AT&T, Verizon and BellSouth--have not acknowledged or denied cooperation with the NSA, despite published reports contending they have voluntarily turned over millions of records of customers' phone calls since the terrorist attacks of 2001. On Friday, the three companies issued carefully worded statements declaring their commitment to protecting consumer privacy and operating within the law.

At the same time, two New Jersey public interest lawyers filed suit against Verizon in U.S. District Court in Manhattan, seeking $1,000 in damages for each record improperly turned over to the NSA or up to $5 billion in all.

Rationale for lawsuit

"No warrants have been issued for the disclosure of such information, no suspicion of terrorist activity or other criminal activity has been alleged against the subscribers," the suit alleges.

The phone-records controversy echoes a similar civil liberties debate that erupted in December following revelations about a secret NSA program to intercept international phone calls involving parties in the U.S. It is illegal for the agency to spy on U.S. citizens without court approval.

Gen. Michael Hayden, President Bush's nominee to lead the CIA, once headed the NSA and oversaw surveillance programs. Speaking to reporters Friday on Capitol Hill, he declined to comment on specific operations but insisted the agency had acted lawfully.

Some of the nation's top experts in telecommunications law said phone companies that cooperated might have violated a federal law that severely restricts sharing customer phone records with the government and could be on the hook for billions of dollars in civil liability.

Peter Swire, an Ohio State University law professor who was the Clinton administration's top adviser on privacy issues, said the 1986 Stored Communications Act forbids such a turnover to the government without a warrant or court order. The law gives consumers the right to sue for violations of the act and allows them to recover a minimum $1,000 for each violation.

The law does allow phone companies to hand over records in emergencies, but until recently that was narrowly defined. Disclosure was limited to cases where the company "reasonably" believed there was an "immediate danger of death or serious physical injury" that disclosure might help prevent.

"If this was a program ongoing for several years, then it's hard to say that there was a continuing reasonable belief of immediate danger over the entire time," said Orin Kerr, a telecommunications law specialist at George Washington University, on his Internet Web log.

In the renewal of the USA Patriot Act in March, Congress softened the language to the point where new disclosures of phone records might arguably pass muster, Kerr said. Phone companies no longer have to have a "reasonable" belief that death or injury lurks, only a "good faith" belief. They also no longer have to believe that such a tragedy is "immediate."

The allegations of cooperation between phone giants and government intelligence operatives comes as little surprise to telecommunications experts.

"There's a history of close cooperation with the government that goes back to World War II," said Bob Atkinson, policy research director at the New York-based Columbia Institute for Tele-Information. "It was especially true during the Cold War that the phone company was willing to go to the outer limits of the legal situation to cooperate with the government. Today there may be differences of opinion about the legality, but phone executives will err on the side of cooperation rather than non-cooperation."

When federal authorities seek carrier cooperation in secret surveillance, as the NSA has done, it puts them "on the horns of a dilemma," Atkinson said. "They can participate and be excoriated if it comes out, or they can choose not to participate and be excoriated if there's an attack and their lack of cooperation is known."

Old issue could surface

The controversies involving the NSA are expected to complicate Senate confirmation hearings for Hayden. He might find himself fielding questions about whether the administration has reconstituted a heavily criticized data-collection effort known as Total Information Awareness that was once run by the Defense Department. It swept up billions of pieces of consumer and personal data and analyzed them in an attempt to detect patterns possibly linked to terrorism.

Following a public outcry over privacy concerns, the department said in 2003 it was dropping the program.

The existence of a second covert information-gathering program suggests the administration has reconstituted at least parts of the TIA program, said former Sen. Bob Graham (D-Fla.), a former chairman of the Senate Intelligence Committee.

At least parts of the TIA program have been revived at NSA, according to a Feb. 23 report in the National Journal. Earlier in February, Intelligence Committee member Sen. Ron Wyden (D-Ore.) asked Hayden if several of the TIA programs had been shifted to other intelligence agencies.

"Senator, I would like to answer you in closed session," Hayden replied.

bsecter@tribune.com

jvan@tribune.com

Andrew Zajac of the Tribune's Washington Bureau contributed to this report